FINANCIAL STATEMENT ANALYSIS

Name of the student Preeti Arora Bubbles Thadani Jyoti Punj Prakash Mohini Rathore Rahul Bhardwaj Yogendra Singh Chauhan Shubham Kumar PG Roll No: PGP20112074 PGP20112181 PGP20112004 PGP20112121 PGP20112268 PGP20112137 PGP20112256

Submitted to Subject Submitted on Marks Allotted Remarks(if any)

KIRTIKA MALHOTRA BASIC OF ACCOUNTANCY 22-09-2011

PEPSI CO PVT LTD

PepsiCo is an American multinational corporation headquartered in Purchase, Harrison, New York, United States. It manufactures, marketing & distribution of grain- based snack foods, beverages, and other products. PepsiCo was formed in 1965 with the merger of the PepsiCola Company and Frito-Lay. PepsiCo has since expanded from its namesake product Pepsi to a broader range of food & beverages brands, the largest of which include an acquisition of Tropicana in 1998 and a merger with Quaker Oats in 2001, which added the Gatorade brand to its portfolio as well. PepsiCo is a SIC 2080(beverage) company. As of 2009, 19 of PepsiCos product lines generated retail sales of more than $ 1 billion each. PepsiCo products were distributed across more than 200 countries in 2009, which generated $ 43.3 billion net revenue in annual. Based on NET REVENUE, PepsiCo is the second largest food & beverage business in the world. Within North America, PepsiCo is ranked as the largest food & beverage business in terms of NET REVENUE. Indra Krishnamurthy Nooyi has been the chief executive of PepsiCo since 2006. Approximately 285,000 people employed worldwide in PepsiCo as of 2010.

PRODUCT
PepsiCos product mix consists of 63% foods and 37% beverages. On a worldwide basis, the companys current product lines include several hundred brands like Pepsi, Mountain Dew, Lays, Tropicana, 7UP, Miranda, Aquafina, etc

AREA OF BUSINESS
The structure of PepsiCos global operations has shifted multiple times in its history as a result of international expansion, and as of 2010 it is separated into four main divisions: PepsiCo Americas Foods PepsiCo Americas Beverages PepsiCo Europe PepsiCo Asia, Middle East & Africa

As of 2009, 71% of the companys net revenue came from North and South America, 16% from Europe and 13% from Asia, the Middle East & Africa.

CORPORATE SOCIAL RESPONSIBILITY

PepsiCo has maintained a philanthropic program since 1962 called the PepsiCo Foundation, in which it primarily funds nutrition and activity, safe water and water usage efficiencies, and education, according to the foundations website

FINANCIAL STATEMENT ANALYSIS

Financial statement analysis is the collective name for the tools and techniques that are intended to provide relevant information to decision-makers. The purpose of such analysis is to assess a companys financial health and performance. Financial statement analysis consists of comparisons for the same company over periods of time and for different companies in the same industry or different industries. Financial statement analysis enables investors and creditors to: Evaluate past performance and financial position Predict future performance
SOURCES OF INFORMATION

Company reports Stock exchanges Business periodicals Information services

Types of financial statement analysis:

BALANCE SHEET

INCOME AND EXPENDITURE ACCOUNT

CASH FLOW ANALYSIS

RATIO ANALYSIS

INTRA FIRM COMPARSION: HORIZONTAL/ VERTICAL ANALYSIS BALANCE SHEET:

A financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. These three balance sheet segments give investors an idea as to what the company owns and owes, as well as the amount invested by the shareholders. It's called a balance sheet because the two sides balance out. This makes sense: a company has to pay for all the things it has (assets) by either borrowing money (liabilities) or getting it from shareholders (shareholders' equity). Each of the three segments of the balance sheet will have many accounts within it that document the value of each. Accounts such as cash, inventory and property are on the asset side of the balance sheet, while on the liability side there are accounts such as accounts payable or long-term debt. The exact accounts on a balance sheet will differ by company and by industry, as there is no one set template that accurately accommodates for the differences between different types of businesses.

ASSESTS

CURRENTS ASSETS FIXED ASSETS CURRENT LIABILITIES LONG TERM LIABILITIES

LIABILITIES

SHARE HOLDERS FUNDS

SHAREHOLDERS EQUITY OWENERS LIABILITIES

BALANCE SHEET OF 5 CONSEQUETIVE YEARS

PARTICULAR CURRENT ASSESTS CASH & CASH EQUIVALENT SHORT TERM INVESTMENT ACCOUNTS AND NOTES RECEIVABLE,NET INVENTORIES PREPAID EXPENSES & OTHER CURRENT ASSESTS TOTA CURRENT ASSESTS PROPERTY, PLANT & EQUIPMENT, NET AMORTIZATION INTANGIBLE ASSESTS, NET GOODWILL OTHER NON AMORTIZABLE INTANGIBLE ASSESTS NON AMORTIZABLE INTANGIBLE ASSESTS INVESTMENT IN NON CONTROLLED AFFILIATES OTHER ASSESTS TOTAL ASSESTS LIABILITIES & EQUITY CURRENT LIABILITY SHORT TERN OBLIGATION ACCOUNT PAYABLE & OTHER C.L INCOME TAX PAYABLE TOTAL CURRENT LIABILITY LONG TERM OBLIGATION OTHERL IABILITY DEFERRRED INCOME TAXES TOTAL LIABILITIES COMMITMENTS ANS CONTIGENCIES PREFERRED STOCK, NO. PER VALUE REPURCHASED PREFERRED STOCK PEPSI CO COMMON SHARE HOLDERS EQUITY Common stock, PER SHARE CAPITAL IN EXCESS OF PER VALUE RETAINED EARNINGS ACCUMULATED OTHER COMPREHENSIVE LOSS REPURCHASED COMMON STOCK TOTAL PEPSICO COMMON SHAREHOLDERS EQUITY NON- CONTROLLING INTERESTS TOTAL EQUITY TOTAL LIABILITIES & SHAREHOLDERS EQUITY 2010 5943 426 6323 3372 1505 17569 19058 2025 14661 11783 26444 1368 1689 68153 2009 3943 192 4624 2618 1194 12571 12671 841 6534 1782 8316 4484 965 39848 2008 2064 213 4683 2522 1324 10806 11663 732 5124 1128 6252 3883 2658 35994 2007 910 1571 4389 2290 991 10151 11228 796 5169 1248 6417 4354 1682 34628 2006 1651 1171 3725 1926 657 9130 9687 637 4594 1212 5806 3690 980 29930

4898 10923 71 15892 19999 6729 4057 46677 41 -150 31 4527 37090 -3630 -16745 21273 312 21476 68153

464 8127 165 8756 7400 5591 659 22406 41 -145 30 250 33805 -3794 -13383 16908 638 17442 39848

369 8273 145 8787 7858 7017 226 23888 41 -138 30 351 30638 -4694 -14122 12203

7602 151 7753 4203 4792 646 17394 41 -132 30 450 28184 -952 -10387 17325

274 6496 90 6860 2550 4624 528 14562 41 -120 30 584 24837 -2246 -7758 15447

35994

34628

29930

HORIZONTAL/VERTICAL ANALYSIS
PARTICULAR CURRENT ASSESTS CASH & CASH EQUIVALENT SHORT TERM INVESTMENT ACCOUNTS AND NOTES RECEIVABLE,NET INVENTORIES PREPAID EXPENSES & OTHER CURRENT ASSESTS TOTA CURRENT ASSESTS PROPERTY, PLANT & EQUIPMENT, NET AMORTIZATION INTANGIBLE ASSESTS, NET GOODWILL OTHER NON AMORTIZABLE INTANGIBLE ASSESTS NON AMORTIZABLE INTANGIBLE ASSESTS INVESTMENT IN NON CONTROLLED AFFILIATES OTHER ASSESTS TOTAL ASSESTS LIABILITIES & EQUITY CURRENT LIABILITY SHORT TERN OBLIGATION ACCOUNT PAYABLE & OTHER C.L INCOME TAX PAYABLE TOTAL CURRENT LIABILITY LONG TERM OBLIGATION OTHERL IABILITY DEFERRRED INCOME TAXES TOTAL LIABILITIES COMMITMENTS ANS CONTIGENCIES PREFERRED STOCK, NO. PER VALUE REPURCHASED PREFERRED STOCK PEPSI CO COMMON SHARE HOLDERS EQUITY Common stock, PER SHARE CAPITAL IN EXCESS OF PER VALUE RETAINED EARNINGS ACCUMULATED OTHER COMPREHENSIVE LOSS REPURCHASED COMMON STOCK TOTAL PEPSICO COMMON SHAREHOLDERS EQUITY NON- CONTROLLING INTERESTS TOTAL EQUITY TOATAL LIABILITIES & SHAREHOLDERS EQUITY 2007-2008 CHANGE CHANGE% 1154 -1358 294 232 333 655 435 -64 -45 -120 -165 -471 976 1366 126.8131868 -86.44175684 6.698564593 10.13100437 33.6024218 6.45256625 3.874242964 -8.040201005 -0.870574579 -9.615384615 -2.571294998 -10.81763895 58.02615933 3.944784567 VERTCAL 5.734289 0.591765 13.0105 7.006723 3.678391 30.02167 32.40262 2.033672 14.23571 3.133856 17.36956 10.78791 7.384564 100

369 671 -6 1034 3655 2225 -420 6494 0 -6 0 -99 2454 -3742 -3735 -5122

0 8.826624572 -3.973509934 13.33677286 86.96169403 46.43155259 -65.01547988 37.33471312 0 4.545454545 0 0 -22 8.70706784 393.0672269 35.95840955 -29.56421356 0 0 3.944784567

1.025171 22.98439 0.402845 24.4124 21.83142 19.49492 0.627882 66.36662 0.113908 -0.3834 0 0.083347 0.975163 85.11974 -13.0411 -39.2343 33.90287 0 0 100

1366

HORIZONTAL/VERTICAL ANALYSIS
PARTICULAR CURRENT ASSESTS CASH & CASH EQUIVALENT SHORT TERM INVESTMENT ACCOUNTS AND NOTES RECEIVABLE,NET INVENTORIES PREPAID EXPENSES & OTHER CURRENT ASSESTS TOTA CURRENT ASSESTS PROPERTY, PLANT & EQUIPMENT, NET AMORTIZATION INTANGIBLE ASSESTS, NET GOODWILL OTHER NON AMORTIZABLE INTANGIBLE ASSESTS NON AMORTIZABLE INTANGIBLE ASSESTS INVESTMENT IN NON CONTROLLED AFFILIATES OTHER ASSESTS TOTAL ASSESTS LIABILITIES & EQUITY CURRENT LIABILITY SHORT TERN OBLIGATION ACCOUNT PAYABLE & OTHER C.L INCOME TAX PAYABLE TOTAL CURRENT LIABILITY LONG TERM OBLIGATION OTHERL IABILITY DEFERRRED INCOME TAXES TOTAL LIABILITIES COMMITMENTS ANS CONTIGENCIES PREFERRED STOCK, NO. PER VALUE REPURCHASED PREFERRED STOCK PEPSI CO COMMON SHARE HOLDERS EQUITY Common stock, PER SHARE CAPITAL IN EXCESS OF PER VALUE RETAINED EARNINGS ACCUMULATED OTHER COMPREHENSIVE LOSS REPURCHASED COMMON STOCK TOTAL PEPSICO COMMON SHAREHOLDERS EQUITY NON- CONTROLLING INTERESTS TOTAL EQUITY TOATAL LIABILITIES & SHAREHOLDERS EQUITY 2008-2009 CHANGE CHANGE% 1879 -21 -59 96 -130 1765 1008 109 1410 654 2064 601 -1693 3854 91.03682171 -9.85915493 -1.259876148 3.806502776 -9.818731118 16.33351842 8.642716282 14.89071038 27.5175644 57.9787234 33.0134357 15.47772341 -63.69450715 10.70734011 VERTICAL 9.895101 0.481831 11.6041 6.569966 2.996386 31.54738 31.79833 2.11052 16.39731 4.471994 20.8693 11.25276 2.421702 100

95 -146 20 -31 -458 -1426 433 -1482 0 -7 0 -101 3167 900 739 4705 638 17442 3854

25.74525745 -1.764776985 13.79310345 -0.3527939 -5.828455078 -20.32207496 191.5929204 -6.203951775 0 5.072463768 0 0 -28.77492877 10.33683661 -19.17341287 -5.232969834 38.55609276 0 0 10.70734011

1.164425 20.395 0.414073 21.9735 18.57057 14.03082 1.653784 56.22867 0.102891 -0.36388 0 0.075286 0.627384 84.83487 -9.52118 -33.5851 42.43124 1.601084 43.77133 100

HORIZONTAL/VERTICAL ANALYSIS
PARTICULAR CURRENT ASSESTS CASH & CASH EQUIVALENT SHORT TERM INVESTMENT ACCOUNTS AND NOTES RECEIVABLE,NET INVENTORIES PREPAID EXPENSES & OTHER CURRENT ASSESTS TOTA CURRENT ASSESTS PROPERTY, PLANT & EQUIPMENT, NET AMORTIZATION INTANGIBLE ASSESTS, NET GOODWILL OTHER NON AMORTIZABLE INTANGIBLE ASSESTS NON AMORTIZABLE INTANGIBLE ASSESTS INVESTMENT IN NON CONTROLLED AFFILIATES OTHER ASSESTS TOTAL ASSESTS LIABILITIES & EQUITY CURRENT LIABILITY SHORT TERN OBLIGATION ACCOUNT PAYABLE & OTHER C.L INCOME TAX PAYABLE TOTAL CURRENT LIABILITY LONG TERM OBLIGATION OTHERL IABILITY DEFERRRED INCOME TAXES TOTAL LIABILITIES COMMITMENTS ANS CONTIGENCIES PREFERRED STOCK, NO. PER VALUE REPURCHASED PREFERRED STOCK PEPSI CO COMMON SHARE HOLDERS EQUITY Common stock, PER SHARE CAPITAL IN EXCESS OF PER VALUE RETAINED EARNINGS ACCUMULATED OTHER COMPREHENSIVE LOSS REPURCHASED COMMON STOCK TOTAL PEPSICO COMMON SHAREHOLDERS EQUITY NON- CONTROLLING INTERESTS TOTAL EQUITY TOATAL LIABILITIES & SHAREHOLDERS EQUITY 2009-2010 CHANGE(2010) CHANGE% 2000 234 1699 754 311 4998 6387 1184 8127 10001 18128 50.7227999 121.875 36.74307958 28.80061115 26.04690117 39.75817357 50.4064399 140.78478 124.3801653 561.2233446 217.989418 -3116 69.49152542 724 75.02590674 28305 71.03242321 VERTICAL 8.720086 0.625064 9.277655 4.947691 2.208267 25.77876 27.96355 2.971256 21.51189 17.28904 38.80093 2.007248 2.478247 100

4434 955.6034483 2796 34.40383906 -94 56.96969697 7136 81.4984011 12599 170.2567568 1138 20.35414058 3398 515.629742 24271 108.3236633 0 0 -5 3.448275862 0 1 3.333333333 4277 1710.8 3285 9.717497412 164 4.322614655 -3362 25.1214227 4365 25.81618169 -326 51.09717868 4034 23.12808164 28305 71.03242321

7.186771 16.02717 0.104177 23.31812 29.34427 9.873373 5.952783 68.48855 0.060159 -0.22009 0 0.045486 6.642408 54.42167 -5.32625 -24.5697 31.21359 0.457793 31.51145 100

ANALYSIS
The statement of financial position provides creditors, investors, and analysts with information on company's resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company's assets as well as an indication of cash flows that may come from receivables and inventories. Assets are resources controlled by the company as a result of past events and from which future economic benefits are expected to flow to the entity. Total current assets- current assets are assets which will normally be converted into cash within a fiscal year or within an operating cycle. The total current assets are increasing from 2008 to 2009 and then again from 2009 to 2010. Current assets include: cash and cash equivalent- PepsiCo Inc.'s cash and cash equivalents increased from 2 008 to 2009 and from 2009 to 2010. Short term investment- Investments which are intended to be sold in the short term (less than one year) including trading securities, available-for-sale securities, held-to-maturity securities, and other short-term investments. PepsiCo short-term investments declined from 2008 to 2009 but then increased from 2009 to 2010 exceeding 2008 level. Inventories- in case of manufacturing firms, inventory would mainly consist of materials and components required for the manufacturing of the finished goods, goods in the process of conversion remaining with the factory at various stages of completion. Inventories have been continuously increasing for all the years. Prepaid expenses- some of the items of expenses are usually paid in advance such as rent, taxes, subscription and insurance. The rationale behind including these prepayments as current assets is that in case these prepayments had not been made, they would have required use of cash during the period. the prepaid expenses decreased in 2009 and then again increased in 2010. Fixed assets- fixed assets are relatively long lived items owned by the business. the purpose of holding these asets is very different from that of holding current assets. the benefit of these assets is available not only in the accounting period in which the cost is incurred but overall several accounting periods. these assets include:plant property and equipment-Tangible assets that are held by an entity for use in the production or supply of goods and services, for rental to others, or for administrative purposes and that are expected to provide economic benefit for more than one year; net of accumulated depreciation. Examples include land, buildings, and production equipment. PepsiCo property, plant and equipment, net increased from 2008 to 2009 and from 2009 to 2010.

Goodwill- the goodwill of the company is increasing from 2008 to 2009 and from 2009 to 2010 which is a positive sign for the company. Total liabilities- Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity. Sum of the carrying amounts as of the balance sheet date of all liabilities that are recognized. Liabilities are probable future sacrifices of economic benefits arising from present obligations of an entity to transfer assets or provide services to other entities in the future. PepsiCo total liabilities declined from 2008 to 2009 but then increased from 2009 to 2010 exceeding 2008 level. Account payable- bills payable to vendors for goods and services received that are used in an entity's business. Used to reflect the current portion of the liabilities within one year or within the normal operating cycle. PepsiCo Inc.'s accounts payable increased from 2008 to 2009 and from 2009 to 2010.

INTRA FIRM COMPARSION INCOME AND EXPENDITURE STATEMENT:INCOME AND EXPENDITURE ACCOUNT is merely another name for profit and loss account. such type of profit and loss account is generally adopted by non trading concerns like clubs, societies, hospitals, and like etc. this account is credited with a all earnings (both realized and unrealized ) and debited with all expenses (both paid and unpaid ) . The difference represents a surplus of deficiency for a given period which is carried to the capital account. It should be noted that items of receipts or payments of capital nature such as legacies, purchases or sales of any fixed assets must not be included in this account.

INCOME AND EXPENDITURE ACCOUNT OF 5 CONCEQUETIVE YEARS

PARTICULAR NET REVENUE COGS GROSS PRIFIT SELLING, GENERAL & ADM. EXPENSE AMORTZATION OF INTANGIBE ASSESTS OPERATING PROFIT BOTTLING EQUITY INCOME INTEREST EXPENSES INTEREST INCOME INCOME BEFORE INCOME TAX PROVISION FOR INCOME TAX NET INCOME 2010 57838 26575 31263 22814 117 8332 735 -903 68 8232 1894 6338 2009 43232 20099 23133 15026 63 8044 365 -397 67 8079 2100 5979 2008 43251 20351 22900 15877 64 6959 374 -329 41 7045 1879 5166 2007 39474 18038 21436 14208 58 7170 560 -224 125 7631 1973 5658 2006 35137 15762 19375 12711 162 6502 553 -239 173 6989 1347 5642

HORIZONTAL/VERTICAL ANAYLSIS (2006-2007)

PARTICULAR NET REVENUE COGS GROSS PRIFIT SELLING, GENERAL & ADM. EXPENSE AMORTZATION OF INTANGIBE ASSESTS OPERATING PROFIT BOTTLING EQUITY INCOME INTEREST EXPENSES INTEREST INCOME INCOME BEFORE INCOME TAX PROVISION FOR INCOME TAX NET INCOME

CHANGE(2007) CHANGE% VERTICAL 4337 12.3431141 100 2276 14.4397919 45.6959011 2061 10.63741935 54.3040989 1497 -104 668 7 15 -48 642 626 16 11.77720085 -64.19753086 10.27376192 1.265822785 -6.276150628 -27.74566474 9.1858635 46.47364514 0.28358738 35.99331205 0.146932158 18.16385469 1.418655317 -0.567462127 0.316664133 19.33171201 4.998226681 14.33348533

HORIZONTAL/VERTICAL ANALYSIS (2007-2008)

PARTICULAR NET REVENUE COGS GROSS PRIFIT SELLING, GENERAL & ADM. EXPENSE AMORTZATION OF INTANGIBE ASSESTS OPERATING PROFIT BOTTLING EQUITY INCOME INTEREST EXPENSES INTEREST INCOME INCOME BEFORE INCOME TAX PROVISION FOR INCOME TAX NET INCOME CHANGE(2008) CHANGE% VERTICAL 3777 9.568323453 100 2313 12.82292937 47.05324732 1464 6.829632394 52.94675268 1669 6 -211 -186 -105 -84 -586 -94 -492 11.74690315 10.34482759 -2.942817294 -33.21428571 46.875 -67.2 -7.67920325 -4.764318297 -8.695652174 36.70897783 0.147973457 16.08980139 0.864719891 -0.760676054 0.094795496 16.28864073 4.344408222 11.9442325

HORIZONTAL/VERTICAL ANALYSIS (2009-2008)

PARTICULAR NET REVENUE COGS GROSS PRIFIT SELLING, GENERAL & ADM. EXPENSE AMORTZATION OF INTANGIBE ASSESTS CHANGE2009 CHANGE%2009 VERTICAL -19 -0.04392962 100 -252 -1.23826839 46.49102517 233 1.017467249 53.50897483 -851 -1 -5.359954651 -1.5625 34.75666173 0.145725389

OPERATING PROFIT BOTTLING EQUITY INCOME INTEREST EXPENSES INTEREST INCOME INCOME BEFORE INCOME TAX PROVISION FOR INCOME TAX NET INCOME

1085 -9 -68 26 1034 221 813

15.59132059 -2.406417112 20.66869301 63.41463415 14.67707594 11.76157531 15.73751452

18.60658771 0.844282013 -0.918301258 0.154977794 18.68754626 4.857512953 13.83003331

HORIZONTAL/VERTICAL ANALYSIS (2010-2009)

PARTICULAR NET REVENUE COGS GROSS PRIFIT SELLING, GENERAL & ADM. EXPENSE AMORTZATION OF INTANGIBE ASSESTS OPERATING PROFIT BOTTLING EQUITY INCOME INTEREST EXPENSES INTEREST INCOME INCOME BEFORE INCOME TAX PROVISION FOR INCOME TAX NET INCOME CHANGE(2010) %CHANGE(2010) vertical analysis(2010) 14606 33.78515914 100 6476 32.22050848 45.94730108 8130 35.14459863 54.05269892 7788 54 288 370 -506 1 153 -206 359 51.83016105 85.71428571 3.580308304 101.369863 127.4559194 1.492537313 1.893798737 -9.80952381 6.004348553 39.44465576 0.202289152 14.405754 1.27079083 -1.561257305 0.117569764 14.23285729 3.274663716 10.95819358

ANALYSIS
Net revenue- PepsiCo Inc.'s net revenue declined from 2008 to 2009 but then increased from 2009 to 2010 exceeding 2008 level. In 2009, they incurred a charge of $36 million in conjunction with the Productivity for Growth program that began in 2008. The program includes actions in all divisions of the business, including the closure of six plants that they believe will increase cost competitiveness across the supply chain, upgrade and streamline the product portfolio, and simplify the organization for more effective and timely decisionmaking. In 2010, they incurred merger and integration charges of $799 million related to the acquisitions of PBG and PAS. The merger and integration charges related to our acquisitions of PBG and PAS are being incurred to help create a more fully integrated supply chain and go-to-market Business model, to improve the effectiveness and efficiency of the Distribution of our brands and to enhance our revenue growth. These charges also include closing costs, one-time financing costs and advisory fees related to our acquisitions of PBG and PAS. In addition, we recorded

$9 million of merger-related charges, representing our share of the respective merger costs of PBG and PAS, in bottling equity income. Operating profit-`PepsiCo Inc.'s operating profit increased from 2008 to 2009 and from 2009 to 2010 because the impact on market of the commodity hedges and lower reconstructing, impairment charges related to the productivity of growth program were low thereby increasing operating profit of the company. Net income- PepsiCo Inc.'s income before income taxes increased from 2008 to 2009 and from 2009 to 2010. The net income which tells the consolidated profit or loss for the period increased from 2008 to 2009 and then again decreased in 2010.because the interest expenses incurred in 2010 were large.

CASH FLOW STATEMENT

In financial accounting, a cash flow statement is also known as fund flow statement or statement of cash flow. It is a financial statement that shows how changes in balance sheet and income and expenditure account affects the cash and cash equivalents, and breaks down the analysis into operating, investing and financial activities. Essentially the cash flow statement is concerned with flow of cash in and cash out of the business. The statement captures both the current operating results and the accompanying changes in the balance sheet . As an analytical tool , the statement of cash flows is useful in determining the short term viability of a company , particularly its ability to pay bills The cash flow statement is intended to

Provide information on a firms liquidity and solvency and its ability to change cash flows in future circumstances Provide additional information for evaluating changes in assets , liabilities and equity Improve the comparability of different accounting methods Indicate the amount , timing and probability of future cash flows

OPERATING ACTIVITIES INVESTING ACTIVITIES

FINANACIAL ACTIVITIES

CASH FLOW STATEMENT OF 5 CONCEQUETIVE YEARS

PARTICULARS Operating Activities Net Income Depreciation and Amortization Stock-Based compensation expense Restructuring and Impairment Charges Cash payment for restructuring charges Merger and Integration costs Cash Payments for merger and integration costs 2010 6338 2327 299 -31 808 -385 2009 5979 1635 227 36 -196 50 -49 2008 5166 1543 238 543 -180 2007 5670 1426 260 102 -22

Gain on previously held equity interests in PBG and PAS Assets Write Off Non-cash foreign exchange loss related to Venezuela devaluation Excess tax benefits from share-based payment arrangements Pension and retiree medical plan contributions Pension and retiree medical plan expenses Bottling equity income, net of dividends Deferred income taxes and other tax charges and credits Change in accounts and notes receivable Change in inventories Change in prepaid expenses and other current assets Change in accounts payable and other current liabilities Change in income taxes payable Other, net Net Cash Provided by Operating Activities Investing Activities Capital spending Sales of property, plant and equipment Acquisitions of PBG and PAS, net of cash and cash equivalents acquired Acquisition of manufacturing and distribution rights from DPSG Investment in WBD Other acquisitions and investments in no controlled affiliates Divestitures Cash restricted for pending acquisitions Cash proceeds from sale of PBG and PAS stock Short-term investments, by original maturity More than three months purchases More than three months maturities Three months or less, net Other investing, net Net Cash Used for Investing Activities

-958 145 120 -107 -1734 453 42 500 -268 276 144 488 123 -132 8448 2010 -3253 81 -2833 -900 -463 -83 12

-42 -1299 423 -235 284 188 17 -127 -133 319 -281 6796 2009 -2128 58

-107 -219 459 -202 573 -549 -345 -68 718 -180 -391 6999 2008 -2446 98

-208 -310 535 -441 118 -405 -204 -16 522 128 -221 6934 2007 -2430 47

-500 99 15

-1925 6 -40 358 -156 62 1376 -2667

-1320

315 -83 113 -413 27 -3744

-12 29 -229 -17 -7668

-29 71 13 -2401

Financing Activities Proceeds from issuances of long-term debt Payments of long-term debt Debt repurchase Short-term borrowings, by original maturity More than three months proceeds More than three months payments Three months or less, net Cash dividends paid Share repurchases common Share repurchases preferred

2010 6451 -59 -500 227 -96 2351 -2978 -4978 -5

2009 1057 -226

2008 3719 -649

2007 2168 -579

26 -81 -963 -2732 -7

89 -269 625 -2541 -4720 -6

83 -133 -345 -2204 -4300 -12

Proceeds from exercises of stock options Excess tax benefits from share-based payment arrangements Acquisition of no controlling interest in Lebedyansky from PBG Other financing Net Cash Provided by/(Used for) Financing Activities Effect of exchange rate changes on cash and cash equivalents Net Increase in Cash and Cash Equivalents Cash and Cash Equivalents, Beginning of Year Cash and Cash Equivalents, End of Year

1038 107 -159 -13 1386 -166 2000 3943 5943

413 42 -26 -2497 -19 1879 2064 3943

620 107

1108 208

-3025 -153 1154 910 2064

-4006 75 -741 1651 910

CASH FLOW ANAYSIS (2009-2010)

PARTICULARS Operating Activities Net Income Depreciation and Amortization Stock-Based compensation expense Restructuring and Impairment Charges Cash payment for restructuring charges Merger and Integration costs Cash Payments for merger and integration costs Gain on previously held equity interests in PBG and PAS Assets Write Off Non-cash foreign exchange loss related to Venezuela devaluation Excess tax benefits from share-based payment arrangements Pension and retiree medical plan contributions Pension and retiree medical plan expenses Bottling equity income, net of dividends Deferred income taxes and other tax charges and credits Change in accounts and notes receivable Change in inventories Change in prepaid expenses and other current assets Change in accounts payable and other current liabilities Change in income taxes payable Other, net Net Cash Provided by Operating Activities change change% 359 692 72 -36 165 758 -336 -958 145 120 -65 -435 30 277 216 -456 259 271 621 -196 149 1652 6.004349 42.32416 31.71806 -100 -84.1837 1516 685.7143

154.7619 33.4873 7.092199 -117.872 76.05634 -242.553 1523.529 -213.386 -466.917 -61.442 -53.0249 24.30842

Investing Activities Capital spending Sales of property, plant and equipment Acquisitions of PBG and PAS, net of cash and cash equivalents acquired Acquisition of manufacturing and distribution rights from DPSG Investment in WBD Other acquisitions and investments in noncontrolled affiliates Divestitures

change change% -1125 52.86654 23 39.65517 -2833 -900 -463 417 -87

-83.4 -87.8788

Cash restricted for pending acquisitions Cash proceeds from sale of PBG and PAS stock Short-term investments, by original maturity More than three months purchases More than three months maturities Three months or less, net Other investing, net Net Cash Used for Investing Activities

-15 -100 0 0 17 -58.6207 -42 -59.1549 -242 -1861.54 -17 -5267 219.3669

Financing Activities Proceeds from issuances of long-term debt Payments of long-term debt Debt repurchase Short-term borrowings, by original maturity More than three months proceeds More than three months payments Three months or less, net Cash dividends paid Share repurchases common Share repurchases preferred Proceeds from exercises of stock options Excess tax benefits from share-based payment arrangements Acquisition of noncontrolling interest in Lebedyansky from PBG Other financing Net Cash Provided by/(Used for) Financing Activities

change change% 5394 510.3122 167 -73.8938 -500 201 -15 3314 -246 -4978 2 625 65 -159 13 3883 773.0769 18.51852 -344.133 9.004392 -28.5714 151.3317 154.7619 -50 -155.507

CASH FLOW ANALYSIS (2008-2009)

PARTICULARS Operating Activities Net Income Depreciation and Amortization Stock-Based compensation expense Restructuring and Impairment Charges Cash payment for restructuring charges Merger and Integration costs Cash Payments for merger and integration costs Gain on previously held equity interests in PBG and PAS Assets Write Off Non-cash foreign exchange loss related to Venezuela devaluation Excess tax benefits from share-based payment arrangements change change% 813 15.73751 92 5.962411 -11 -4.62185 -507 -93.3702 -16 8.888889 50 -49 0 0 0 65 -60.7477

Pension and retiree medical plan contributions Pension and retiree medical plan expenses Bottling equity income, net of dividends Deferred income taxes and other tax charges and credits Change in accounts and notes receivable Change in inventories Change in prepaid expenses and other current assets Change in accounts payable and other current liabilities Change in income taxes payable Other, net Net Cash Provided by Operating Activities Investing Activities Capital spending Sales of property, plant and equipment Acquisitions of PBG and PAS, net of cash and cash equivalents acquired Acquisition of manufacturing and distribution rights from DPSG Investment in WBD Other acquisitions and investments in noncontrolled affiliates Divestitures Cash restricted for pending acquisitions Cash proceeds from sale of PBG and PAS stock Short-term investments, by original maturity More than three months purchases More than three months maturities Three months or less, net Other investing, net Net Cash Used for Investing Activities

-1080 493.1507 -36 -7.84314 -33 16.33663 -289 -50.4363 737 -134.244 362 -104.928 -59 86.76471 -851 -118.524 499 -277.222 110 -28.133 -203 -2.90041 change change% 318 -13.0008 -40 -40.8163 0 0 0 1425 -74.026 93 1550 55 -137.5 -358 -100 0 127 -81.4103 9 14.51613 -1363 -99.0552 0 266 -9.97375

Financing Activities Proceeds from issuances of long-term debt Payments of long-term debt Debt repurchase Short-term borrowings, by original maturity More than three months proceeds More than three months payments Three months or less, net Cash dividends paid Share repurchases common Share repurchases preferred Proceeds from exercises of stock options Excess tax benefits from share-based payment arrangements Acquisition of noncontrolling interest in Lebedyansky from PBG Other financing Net Cash Provided by/(Used for) Financing Activities

change change% -2662 -71.5784 423 -65.1772 0 -63 -70.7865 188 -69.8885 -1588 -254.08 -191 7.516726 4720 -100 -1 16.66667 -207 -33.3871 -65 -60.7477 0 -26 528 -17.4545

Effect of exchange rate changes on cash and cash equivalents Net Increase in Cash and Cash Equivalents Cash and Cash Equivalents, Beginning of Year Cash and Cash Equivalents, End of Year

134 -87.5817 725 62.82496 1154 126.8132 1879 91.03682

CASH FLOW ANALYSIS (2007-2008)

PARTICULARS Operating Activities Net Income Depreciation and Amortization Stock-Based compensation expenses Restructuring and Impairment Charges Cash payment for restructuring charges Merger and Integration costs Cash Payments for merger and integration costs Gain on previously held equity interests in PBG and PAS Assets Write Off Non-cash foreign exchange loss related to Venezuela devaluation Excess tax benefits from share-based payment arrangements Pension and retiree medical plan contributions Pension and retiree medical plan expenses Bottling equity income, net of dividends Deferred income taxes and other tax charges and credits Change in accounts and notes receivable Change in inventories Change in prepaid expenses and other current assets Change in accounts payable and other current liabilities Change in income taxes payable Other, net Net Cash Provided by Operating Activities change change% -504 117 -22 441 -158 0 0 0 0 0 101 91 -76 239 455 -144 -141 -52 196 -308 -170 65 -8.88889 8.204769 -8.46154 432.3529 718.1818

-48.5577 -29.3548 -14.2056 -54.195 385.5932 35.55556 69.11765 325 37.54789 -240.625 76.92308 0.93741

Investing Activities Capital spending Sales of property, plant and equipment Acquisitions of PBG and PAS, net of cash and cash equivalents acquired Acquisition of manufacturing and distribution rights from DPSG Investment in WBD Other acquisitions and investments in no controlled affiliates Divestitures Cash restricted for pending acquisitions Cash proceeds from sale of PBG and PAS stock Short-term investments, by original maturity More than three months purchases More than three months maturities

change -16 51 0 0 0 -605 6 -40 43 0 -73 -51

change% 0.658436 108.5106

45.83333

13.65079 87.95181 -45.1327

Three months or less, net Other investing, net Net Cash Used for Investing Activities

1789 -27 1077

-433.172 -100 -28.766

Financing Activities Proceeds from issuances of long-term debt Payments of long-term debt Debt repurchase Short-term borrowings, by original maturity More than three months proceeds More than three months payments Three months or less, net Cash dividends paid Share repurchases common Share repurchases preferred Proceeds from exercises of stock options Excess tax benefits from share-based payment arrangements Acquisition of noncontrolling interest in Lebedyansky from PBG Other financing Net Cash Provided by/(Used for) Financing Activities Effect of exchange rate changes on cash and cash equivalents Net Increase in Cash and Cash Equivalents Cash and Cash Equivalents, Beginning of Year Cash and Cash Equivalents, End of Year

change change% 1551 71.54059 -70 12.08981 0 6 -136 970 -337 -420 6 -488 -101 0 0 981 -228 1895 -741 1154 7.228916 102.2556 -281.159 15.29038 9.767442 -50 -44.0433 -48.5577

-24.4883 -304 -255.735 -44.8819 126.8132

ANALYSIS
Operating Activities
In 2009, our operations provided $6.8 billion of cash, compared to $7.0 billion in the prior year, reflecting a $1.0 billion ($0.6 billion after-tax) discretionary pension contribution to our U.S. pension plans, $196 million of restructuring payments related to the Productivity for Growth program and $49 million of PBG/PAS merger cost payments. Operating cash flow also reflected net favourable working capital comparisons to the prior year. In 2008 operations provided $7.0 billion of cash, compared to $6.9 billion in the prior year, primarily reflecting solid business results. The operating cash flow in 2008 reflects restructuring payments of $180 million, including $159 million related to the Productivity for Growth program, and pension and retiree medical contributions of $219 million, of which $23 million were discretionary.

Investing Activities
In 2009, net cash used for investing activities was $2.4 billion, primarily reflecting $2.1 billion for capital spending and $0.5 billion for acquisitions. In 2008, $2.7 billion of investing activities, primarily reflecting $2.4 billion for capital spending and $1.9 billion for acquisitions. Significant acquisitions included the joint acquisition with PBG in Russia

and the acquisition of a snacks company in Serbia. The use of cash was partially offset by net proceeds from sales of short-term investments of $1.3 billion and proceeds from sales of PBG and PAS stock of $358 million. Net capital spending of about $3.6 billion in 2010. Additionally, in connection with the December 7, 2009 agreement with Dr Pepper Snapple Group, Inc. (DPSG) to manufacture and distribute certain DPSG products in the territories where they are currently sold by PBG and PAS, they will make an upfront payment of $900 million to DPSG upon closing of the proposed mergers with PBG and PAS.

Financing Activities
In 2009, net cash used for financing activities was $2.5 billion, primarily reflecting the return of operating cash flow to our shareholders through dividend payments of $2.7 billion. Net proceeds from issuances of long-term debt of $0.8 billion and stock option proceeds of $0.4 billion were mostly offset by net repayments of short-term borrowings of $1.0 billion. In 2008, $3.0 billion was used for financing activities, primarily reflecting the return of operating cash flow to shareholders through common share repurchases of $4.7 billion and dividend payments of $2.5 billion. The use of cash was partially offset by proceeds from issuances of long-term debt, net of payments, of $3.1 billion, stock option proceeds of $620 million and net proceeds from short-term borrowings of $445 million. Subsequent to year-end 2009, $4.25 billion of fixed and floating rate notes were issued. The net proceeds from this offering to finance a portion of the purchase price for the PBG and PAS mergers and to pay related fees and expenses in connection with the mergers. Annually review of the capital structure with the Board, including the dividend policy and share repurchase activity was done. In the second quarter of 2009, the Board of Directors approved a 6% dividend increase from $1.70 to $1.80 per share. No shares were repurchased in 2009.The current $8.0 billion authorization has approximately $6.4 billion remaining for repurchase. It was anticipated that in 2010 share repurchases together with a voluntary $600 million pre-tax pension plan contribution will total about $5 billion. .

RATIO ANALYSIS

IT TELLS US ABOUT OVERALL OPERATING SUCCESS AS AN INVESTOR, WE NEED TO KNOW , IS THE COMPANY CAPABLE ENOUGH PROFITABILITY TO PAY US THE DIVIDENDS

LIQUIDITY

CURRENT RATIO:THIS RATIO SHOWS THE AMOUNT OF C.A A COMPANY HAS FOR EVERY RE.1 OF CURRENT LIABILITY QUICK RATIO: THIS RATIO SHOWS RELATIONSHIP BETWEEN HIGHLY LIQUID CURRENT ASSETS OF THE COMPANY

SOLVENCY

SHOWS ABILITY OF A COMPANY TO PAY BACK ITS CREDITORS AND LENDERS DEBT-EQUITY RATIO :TOTAL DEBTS/ SHAREHOLDERS EQUITY

PROFITABILITY RATIO PROFIT MARGIN RATIO ASSETS TURN OVER RATIO RETURN ON INVESTMENT RATIO RETURN ON EQUITY EARNING PER SHARE LIQUIDITY RATIO CURRENT RATIO QUICK RATIO DEBTOR TURN OVER RATIO INVENTORY TURN OVER RATIO SOLVENCY RATIO DEBT. EQUITY RATIO INTEREST COVERAGE RATIO

FORMULA PAT/SALES*100 SALES/AVG. TOTAL ASSETS PAT/AVG. TOTAL ASSETS* 100 PAT/ AVG. SHAREHOLDERS EUITY * 100 PAT/ WEIGHTED AVG. NO. OF EQUITY CURRENT ASSETS/CURRENT LIABILITIES CA-INVENTORY/CL SALES/AVG. DEBTORS COGS/AVG. INVENTORY TOTAL DEBT/SHAREHOLDERS EQUITY PBIT/INTEREST EXPENSE

2010

2009

2008

10.95819 13.83003 11.88874 1.071064 1.140054 1.224859 11.73693 15.76699 14.56203 33.19976 41.07754 34.82796 3.97 3.81 3.26

1.105525 1.435701 1.229771 0.893343 1.136706 0.942756 8.873122 7.820623 8.458437 1.170357 0.465105 0.674178 10.04097 21.18136 22.28875

The ratio are calculated from the balance sheet of the year ending 2010 and income and expenditure account of the year ending 2010

ANALYSIS

Profitability ratio: It measures the degree of operating success of a company. The reason why investors are interested in a company is that they think they will earn a reasonable return in the form of capital gain and dividend on their investment. Therefore they are keen to learn about the ability of a company to earn revenues in excess of expenses, which can be done only by analyzing the profitability ratios. They can be categorized into five types which are as follows:Profit margin ratio: This ratio measures the amount of net profit earned per rupee of revenue. It shows the cushion or relaxation available to the company in case of increase in cost or decrease in the sales price due to recession or increased competition. As calculated above we can see that the profit margin ratio has increased in the year 2009 with respect to the year 2008 and then again decreased in 2010. Assets turnover ratio: Average total assets are calculated as opening balance of total assets + closing balance of total assets / 2. This ratio tells how many times the assets are turned over in a period and thereby generated sales. Higher assets turnover ratio means that the company is managing its assets efficiently and a lower ratio would denote that the company has more assets than what it really requires. The funds are blocked up in the form of assets lying idle. The company has a lower asset turnover ratio stating that it is not able to manage its funds efficiently and has more assets than required in the company. Return on investment/ return on assets: This ratio tells the amount of net profit earned per rupee of investment made in the assets. It measures the profitability from a given level of investment.

Return on equity: This ratio tells the amount of net profit earned per rupee of shareholders equity. It measures the efficiency of the company in utilizing the shareholders funds. The return on equity rate has increased in 2009 with respect to the year 2008 and then again has decreased in the year 2010.

Earnings per share: Earnings per share tells the amount of net profit earned by the company on one share. E.P.S is basically used for intra- firm comparisons where the earning of one year is compared to the previous year. It cannot be used for inter firm comparisons unless the number of equity shares of both the firms is same. The E.P.S of the company has increased substantially over the years indicating that the amount of net profit earned by the company has increased per share.

Liquidity ratio:

Liquidity is the ability of the company to meet its short term obligations whenever they fall due. An enterprise must have enough cash and other current assets which can be readily converted into cash so that they can pay the creditors and lenders on time. In order to analyse the liquidity position of the company we have a tool in the form of liquidity ratios which are as follows:1) Current ratio :This ratio shows the amount of current assets a company has for every one rupee of current liability. It shows the firm's ability to pay the debt in the short-term. The idle ratio is 2:1. The current ratio of the year 2009 is increasing with respect to the year 2008 and then again decreasing in 2010. Overall the current ratio is more than 1 it means company is in the condition to repay its liability. 2) Quick ratio: this ratio shows the relationship between highly liquid current assets that is current assets- inventories and current liabilities of the company. we exclude inventories because it is two steps away from the conversion into cash(sales and collection). The idle quick ratio is 1:1. As we can see the quick ratio is almost near to 1:1 this is a good sign for company. 3.Inventory turnover ratioIt shows the number of times inventory is converted into sales. A higher ratio mean efficient inventory management. Pepsico inventory turnover ratio is high which indicates efficient inventory management. 3)Solvency ratio: Solvency is the ability of the company to pay back its creditors and lenders. The long term solvency of a company would depend upon the extent to which company is using debt in financing its assets. Solvency ratios are broadly of two types: Debt equity ratio- this ratio measures the relationship between the capital provided by the lenders or creditors and funds provided by the shareholders of the company. A higher debt equity ratio would mean highly leveraged company and a low debt equity ratio indicates conservative use of debt. Pepsico shows a high debt equity ratio which means pepsico is highly leveraged company. Interest coverage ratio- this ratio shows the protection available to the creditors for the payments of interest by the company. A higher ratio would mean adequate safety for the payment of interest even if there is a drop in the companys earnings. There is a slight decrease in the interest coverage ratio but they are able to pay the interest.

The coco-cola is an American multinational beverage corporation of manufacturer, retailers and marketer of non-alcoholic beverage concentrates and syrups. The company is best known for its flagship product coca-cola, invented in 1886. The coca-cola formula and brand was bought in 1889 by asa Candler who incorporated the coca-cola beverage, coca-cola currently offers more than 500 brands in over 200 countries or territories and serves over 1.6 billion servings each day.

INTER FIRM COMPARISON INCOME AND EXPENDITURE ACCOUNT

PARTICULAR NET OPERATING REVENUE COST OF GOODS SOLD GROSS PROFIT OPERATING INCOME INTEREST INCOME INTEREST EXPENSE INCOME BEFORE INCOME TAX INCOME TAX NET INCOME PEPSI 2010 COCA COLA 2010 HORIZONTAL VERTICAL HORIZONTAL VERTICAL CHANGE(%) CHANGE CHANGE CHANGE 33.79 100 13.32 85 33.23 45.95 14.47 36.14 35.15 54.05 12.68 63 3.59 1.5 127.45 1.9 -9.08 6.05 14.4 0.11 -1.56 14.23 3.27 10.96 2.64 27.3 106.47 59.21 16.86 71.72 24.05 0.9 -2.08 40.55 6.78 33.76

ANALYSIS:
NET REVENUE: net revenue of Pepsi co far better than coca-cola. Pepsi earn higher revenue than the coke. The reasons behind those Pepsi co mergers with PGB &PABs. New products launched and in coca-cola cost of goods sold are increased. Gross profit: gross profit of Pepsi co continuously increased from 2008 2010. Because Pepsi made certain acquisitions Volume of product sold is increased But for coke They do well in diet drinks They earn more from diet drinks &coca-cola won leadership of best selling diet soft drinks Operating profit: it is decreased because higher raw material cost, difficult economic condition &investment in emerging markets. And in coca-cola selling &advertising expenses increased

CASH FLOW STATEMENT

PEPSI COCA-COLA HORIZONTAL ANALYSIS (%) 2010 2010 6.004 24.3 71.72 16.44

PARTICULAR OPERATING ACTIVITIES NET INCOME Net cash provided by operating activities INVESTING ACTIVITIES Net cash provided by (used in) investing activities FINANCING ACTIVITIES Net cash provided by (used in) financing activities CASH AND CASH EQUIVALENTS Balance at beginning of year Balance at end of year

219.36

6.17

-155.5 6.43 91.03 50.72

51.11 -35.51 49.35 21.3

BALANCE SHEET
PARTICULAR TOTAL CURRENT ASSETS TOTAL ASSETS TOTAL CURRENT LIABILITY TOTAL LIABILITIES TOTAL EQUITY TOTAL LIABILITIES &EQUITY PEPSI 2010 COCA COLA 2010 HORIZONTAL VERTICAL HORIZONTAL VERTICAL CHANGE (%) CHANGE CHANGE CHANGE 39.75 25.77 22.95 29.64 71.03 100 49.55 100 81.49 108.32 23.12 71.03 23.31 68.48 31.51 100 34.88 49.82 23.55 49.82 25.38 100 42.94 100

RATIO ANALYSIS:
PROFITABILITY RATIO PROFIT MARGIN RATIO ASSETS TURN OVER RATIO RETURN ON INVESTMENT RATIO RETURN ON EQUITY EARNING PER SHARE LIQUIDITY RATIO CURRENT RATIO QUICK RATIO DEBTOR TURN OVER RATIO INVENTORY TURN OVER RATIO SOLVENCY RATIO DEBT. EQUITY RATIO INTEREST COVERAGE RATIO pepsi 2010 10.95819358 1.071064157 11.73692836 CONSUMER coca cola INDUSTRY 2010 2010 33.76804579 0.578271394

6.66 0.66 5.92 14.05

19.52709489 33.19975904 35.61 3.97 5.12 1.105524792 1.165928247 0.893342562 1.02274692 8.87312187 5.073141487 1.17035679 25.16022727 10.04097453 18.99863574

1.17 0.79 5.92 0.9 9.39

ANALYSIS:
PROFITIBILITY RATIO 1. PROFIT MARGIN RATIO Profit Margin Ratio of Pepsi is increased in 2009 but slightly decreased in 2010. Whereas the profit margin ratio of coca cola is increased in both years. And the profit margin ratio of coca cola is greater than Pepsi, it means coca cola is better than in term of profit earned per dollar. There is some reason for the less profit margin ratio of Pepsi. Due to increase in profit after tax of coca cola. Cost of goods sold of Pepsi is higher than coca cola. This is the main reason due to which the Pepsis profit margin ratio is less than Coca-cola. Expense of PepsiCo is high. Profit margin ratio of both companies is higher than the profit margin ratio of consumer goods industry, it means that both company is growing.

1.ASSESTS TURNOVER RATIO: Assets turnover ratio of Pepsi is more than 1 time whereas coca cola is less than 1time. It means that Pepsi is efficiently utilizing its assets than CocaCola. The assets turnover ratio is less than 1 time means Coca-Cola has more assets than what it really requires. Assets turnover ratio of both companies is higher than the assets turnover ratio of consumer goods industry, it means that both company is growing. 2. RETURN ON INVESTMENT RATIO: Return on investment ratio is approximately equal in 2008 & 2009 but there is a small decrease in Pepsi ROI in 2010 at the same time The ROI of coca cola increased. It means that PepsiCos Rate of return on investment made in assets was lower than the Coca-Cola Investment made in those assets which did not give good returns. Return on investment ratio of both companies is higher than the return on investment ratio of consumer goods industry, it means that both company is doing well. 3. RETURN ON EQUITY RATIO Return on investment of Pepsi is Greater than Coca Cola but in 2010, there is slight decrease in Pepsis ROE. Overall in term of Return on equity, Pepsi is Stronger than Coca-Cola. It means that PepsiCo is More efficient than cocacola in utilizing the shareholders funds.
40 35 30 25 20 15 10 5 0 PROFIT MARGIN RATIO PEPSICO COCACOLA CONSUMER GOODS ASSETS TURN RETURN ON RETURN ON OVER RATIO INVESTMENT EQUITY RATIO RATIO

LIQUIDITY RATIO CURRENT RATIO Current ratio of both companies is good and approximately similar to each other and also approximately equal to industry current ratio. It means that both companies are doing well. QUICK RATIO Quick Ratio of both companies is approximately similar to each other and also higher than the industry quick ratio. It means that both companies are doing well in consumer goods industry.

LIQUIDITY RATIO
10 9 8 7 6 5 4 3 2 1 0 Axis Title

PEPSICO COCACOLA CONSUMER GOODS

INVENTORY TURN OVER RATIO

Pepsi has higher turnover ratio than coca cola. It means that PepsiCo efficiently manage their inventory. Inventory turnover Ratio of both companies is higher than the industry inventory turn over Ratio. It means that both the companies is doing well in consumer goods industry. Pepsi ITOR is higher than industry.

SOLVENCY RATIO
DEBT TO EQUITY RATIO Debt equity ratio of Coca cola is much better than PepsiCo. Coca-Cola used their debt aggressively, which results in volatile earnings & Pepsi used their debt conservately.Debt to equity ratio of Coca-Cola is higher than industry debt to equity ratio. INTEREST COVERAGE RATIO Interest coverage ratio of Coca cola is better than PepsiCo. It means that coca cola is more able to pay its interest than PepsiCo. The Interest coverage ratio is higher than the industry interest coverage ratio. It means that both companies is doing well in consumer goods industry.

30 25 20 PEPSICO 15 COCACOLA 10 5 0 DEBT EQUITY RATIO INTEREST COVERAGE RATIO Category 3 Category 4 CONSUMER GOODS INDUSTRY

Conclusion
As per the analysis above we came to the conclusion that the industry performance of both the companies is good in consumer goods industry. In some aspect Pepsi is performing well than the cola-cola company. As we all know that both the companies are completing at the highest level in future we could see more of products and more of profits

REFERENCES WWW.WIKIPEDIA.COM WWW.PEPSI.CO.IN WWW.COCA-COLA.COM www.stock-analysis-on.net